Essay About Uae Central Bank And First Gulf Bank

Dynamics of Corporate Strategy
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Strategic Management 2011
TABLE OF CONTENT
SWOT Analysis
Strategic Management 2011
Executive Summary
This week, 40 years ago the United Arab Emirates (UAE) was least known and was one of the
least developed nations in the world. Thanks to the visionary leadership, the country today
enjoys high standard of living and has achieved an income level comparable to that of
industrialized nations.
The UAE is made up of seven emirates (states), with each emirate having a ruler. December of
1972, these emirates decided to form a union and the UAE was born. Before the union, the
economy of the regions was largely depended on farming, small scale trade, fishing and pearl
diving. With the discovery, exploration and exportation of oil, the UAE realized significant
development within a very short timeframe.
With her dedicated and visionary leaders the UAE developed all sectors including
political, economic and social to the benefit of her people. With all these conducive and
favorable environment of political stability, economic growth and social uplifting the country
established itself as the hub for trade and commerce. This led to the huge demand of different
services including financial and banking.
The oil price, commerce and trade led to the success of the banking industry in the UAE.
Banking and financial services flourished due to the high oil price and the needs of the
thousands of migrant workers who wanted to use these services.
Banking in the UAE is of two categories, local owned or foreign. Foreign owned banks have
some limitations set by the UAE Central bank on the number of branches to operate in the
country.
Banking industry enjoyed strong economic success, and this can be attributed to the low
interest rates, high oil prices and the booming economy of the country with both working
population and businesses seeking credit for their different needs.
One of the banks, which has rejuvenated and enjoyed success, is First Gulf Bank (FGB). In this
Strategic Management 2011
Article we will look FGBs initial failures and later subsequent success after it was taken over.
We look into their strategies and why they succeeded over their competitors.
Company Overview
First Gulf bank (FGB) is one of the fastest growing and successful banks in the UAE. The bank
was first established and headquartered in Ajman (one of the emirates of UAE) in 1979.Due to
some mismanagement and failures the FGB was rescued and taken over by some Abu Dhabi
based investors in 1988. The bank was restructured and the management overhauled.
FGB is a publicly owned organization currently headquartered in Abu Dhabi and is listed on the
Abu Dhabi Securities Exchange. The majority shareholders are some from the Abu Dhabi ruling
family, with Sheikh Hazza Bin Zayed Al Nahyan being the chairman, while his brother Sheikh
Tahnoon Bin Zayed Al Nahyan is the vice chairman.
Towards the end 2002 FGB opened its retail division and started consumer banking. Since then
FGB has achieved tremendous success, both in profit and growth. The major factor for this was
the fact that the UAE economy was booming and demand for credit was overwhelming.
FGB provides different financial services and products for both retail as well corporate markets
and is fully into investments. The Bank offers construction, real estate, industrial, trade finance,
agricultural and personal loans, and treasury and foreign exchange services. Also the bank has
diversified into real estate sector and has gone into joint venture with some well established
giants in this sector including Surouh Properties and